Investing term
What is Calendar rule?
Rebalance on a fixed schedule (e.g. annually) regardless of how far the portfolio has drifted.
A calendar rule rebalances your portfolio on a fixed schedule — say once a year — no matter how far it has or hasn't drifted. Its appeal is simplicity and discipline: you don't have to watch the portfolio constantly or make judgement calls, just rebalance on the set date and get on with life.
The trade-off against a threshold rule is that a calendar rule may rebalance when little has changed (a small, unnecessary trade) or fail to react promptly to a big mid-year move (drifting further than you'd like until the next scheduled date). In practice, for most long-term investors the difference between calendar and threshold rebalancing is small, and the calendar rule's simplicity — set an annual reminder, rebalance, done — makes it easy to stick to. Consistency matters more than the exact method, and a rule you'll actually follow beats a cleverer one you won't.
A calendar rule rebalances on a fixed date — say once a year — regardless of drift. Simple and disciplined, with no monitoring; for most investors the best method is the one they'll actually follow.
For example
Every January you check your mix and rebalance back to target, regardless of how much it moved — a simple calendar rule you can set once and follow for life.
Learn it by doing
That's Calendar rule in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 18, Rebalancing & Maintenance).
Try the free lesson →Why it matters to you
The calendar rule matters because the best rebalancing method is the one you'll actually follow, and its simplicity makes it eminently followable. By removing the need to monitor drift or make judgement calls, it turns rebalancing into a routine annual task, sidestepping the emotion and procrastination that derail more discretionary approaches. For most investors, the modest theoretical edge of threshold rebalancing isn't worth the added complexity — a consistent calendar rule captures nearly all the benefit.
⚠ Rebalancing on autopilot regardless of tax
A calendar rule's simplicity can lead to rebalancing mechanically even when it triggers unnecessary taxable gains in a taxable account, or trades so small they're not worth the cost. Blindly rebalancing on the date without considering whether it's actually needed — or doing it in a way that generates avoidable tax — trades one problem for another. Combine the calendar's discipline with a bit of judgement about cost and tax.